Change of manager in legal entities, branches, representative offices
CHANGE OF MANAGER IN LEGAL ENTITIES, BRANCHES, REPRESENTATIVE OFFICES
The procedure for appointment a manager is average in terms of complexity. But sometimes there may be difficulties, especially if the new manager is a foreign citizen.
We would like to point our main recommendations for changing managers in legal entities, branches and representative offices.
Labour issues As a general rule, local managers in Kazakhstan should have an employment contract with a legal entity. During changing the manager, you need to resolve the issue with the previous manager: terminate the employment contract, change the position and other options.
Regardless of the chosen option, it is important to correctly issue employer orders in order to avoid labor disputes.
Sometimes it is necessary to consider secondment issues because this may cause double taxation.
Tax liabilities In accordance with the legislation of Kazakhstan new manager must obtain an individual identification number (IIN).
It is important to choose natural taxation for manager otherwise it can lead to double taxation that means his salary will be taxed both in Kazakhstan and his country.
Migration issues, visa and permits According to Kazakhstan legislation, managers of branches (representative offices) do not need to obtain work permit in order to hold any implement position. However, issues for visa and country entrance are very important.
Considering the Covid-19 and quarantine restrictions in Kazakhstan, the visa process may take longer. Therefore, it is necessary to start the process of preparing documents for obtaining a visa in advance.
We recommend you not to ignore visa and permit issues, as this may lead to such negative consequences as restrictions on entry, expulsion from Kazakhstan, and suspend the work of the legal entity, branch (representative office).
General recommendations • It is important to properly process all documents (corporate documents, orders, power of attorney) If there will be some discrepancies in documents (incorrect dates, transfer only of part of the necessary authorities), this may delay the entire process of changing the Manager.
It is important to draft all documents in compliance with the documents of the head organization, taking into account the specifics of their work.
• Priorities of Kazakh corporate procedures Very often foreign companies do not take into account the Kazakh legislation, which can lead to the fact that the state authorities will not accept the documents, citing non-compliance with the requirements of the Republic of Kazakhstan. Although the company governed by its laws, however if the Kazakhstan corporate procedures will not be complied, corporate procedures will not be accomplish properly.
Please consider that Kazakh legislation changes time to time so we recommend you to check any information in advance.
This insight was prepared by the Synergy Partners team in corporate law practice. Our lawyers have extensive experience in corporate matters, and can help you with the change of manager in legal entities, branches (representative offices).